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Global corruption report climate change english
1. Global Corruption Report:
Climate Change
The global response to climate change will demand unprecedented international
cooperation, deep economic transformation and resource transfers at a significant
scale. Corruption threatens to jeopardize these efforts.
Transparency International’s Global Corruption Report: Climate Change is the first
publication to comprehensively explore major climate-related corruption risks. The
book provides essential analysis to help policy-makers, practitioners and other
stakeholders understand risks and develop effective responses at a critical moment
when the main architecture for climate governance is being developed. More than 50
leading experts and practitioners contribute, covering four key areas:
• Governance: Investigating major governance challenges towards tackling climate
change.
• Mitigation: Reducing greenhouse gas emissions with transparency and accountability.
• Adapting to climate change: Identifying corruption risks in climate-proofing
development, financing and implementation of adaptation strategies.
• Forestry governance: Responding to the corruption challenges plaguing the forestry
sector, and integrating integrity into international strategies to halt deforestation and
promote reforestation.
Transparency International (TI) is the global civil society organization leading the
fight against corruption. Through more than 90 chapters worldwide and an
international secretariat in Berlin, TI raises awareness of the damaging effects of
corruption and works with partners in government, business and civil society to
develop and implement effective measures to tackle it. For more information, go to
www.transparency.org.
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3. Global Corruption Report:
Climate Change
With support from:
publishing for a sustainable future
London • Washington, DC
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5. Contents
Preface
Huguette Labelle, Chair, Transparency International
xii
Foreword
Kumi Naidoo, Executive Director, Greenpeace International
xiv
Foreword
xvi
Ashok Khosla, President of the International Union for Conservation of Nature (IUCN)
Acknowledgements
xviii
Acronyms and abbreviations
xxi
Executive summary
Transparency International
xxv
Part 1 Introduction
1
1.0 Defining the challenge: threats to effective climate governance
Transparency International
3
1.1 Mapping the climate change and governance challenge: the big picture
Alyson Warhurst, Maplecroft
Part 2 The climate policy framework: examining the effectiveness and
accountability of current processes
2.0 The climate policy framework: examining the effectiveness and
accountability of current processes
Transparency International
2.1 From global power politics to responsible collective governance:
the transparency and inclusiveness of international climate
governance institutions and processes
Peter Newell, University of East Anglia
2.2 Essential building blocs for Kyoto and beyond: agreeing on climate
commitments at national and regional level
GLOBAL_CORRUPTION_CS4.indb v
16
23
25
28
38
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6. vi
CONTENTS
2.2.1
Equal access, unequal voice: business and NGO lobbying on
EU climate policy
Anne Therese Gullberg, Center for International Climate and
Environmental Research (CICERO)
2.2.2 US climate policies: a snapshot of lobbyist influence
Paul Blumenthal, Sunlight Foundation
39
45
2.3 Urban governance and climate change policy
David Dodman and David Satterthwaite, International Institute for
Environment and Development
50
2.4 The matrix of interests and influence in key emerging climate countries
2.4.1 Vested or public interest? The case of India
Sudhir Chella Rajan, Indian Institute of Technology
2.4.2 Climate policies in China: a gradual move towards ambition,
more transparency and nascent citizen involvement
Dieter Zinnbauer, Transparency International
55
56
2.5 Climate policies in Austria: poor accountability breeds slow progress
Shahanaz Mueller, Deloitte Forensic & Dispute Services
71
Part 3 Key elements to building integrity in decision-making
75
3.0 Key elements to building integrity in decision-making
Transparency International
77
3.1 Climate science: the world is its jury
Sheila Jasanoff, Harvard University
79
63
3.2 Making climate governance accountable: reflections on what can
be learned from international environmental governance
Peter M. Haas, University of Massachusetts
83
3.3 The Aarhus Convention: a blueprint for inclusive and accountable
climate governance?
Michael Stanley-Jones, United Nations Environment Programme (UNEP)
87
3.4 Civil society and the climate change process: how does participation
compare as a measure of transparency?
Gareth Sweeney, Transparency International
89
3.5 Holding commitment to account: the governance dimension in
climate change indices
Daniel Abreu, Transparency International
93
3.6 Personal view: a fresh approach to climate politics?
Anthony Giddens, London School of Economics
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7. CONTENTS
vii
Part 4 Ensuring integrity and transparency in climate change mitigation
101
4.0 Ensuring integrity and transparency in climate change mitigation
Transparency International
103
4.1 Greenhouse gas accounting: a foundation for sound climate
governance
Taryn Fransen, World Resources Institute
4.2 Measuring, reporting and verification of NAMAs and their support:
considering capacity, corruption and commitments
Juan Pablo Osornio, Center for Clean Air Policy, Ingmar Schumacher,
Banque Centrale du Luxembourg and Krina Despota, Transparency
International
4.3 The trade-offs of trade: realities and risks of carbon markets
Lambert Schneider, Öko-Institut
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Slovak public see no credit in government’s carbon trading
Emília Sic
ˇáková-Beblavá and Gabriel Šípoš,Transparency
International Slovakia
Permit politics: Hungary’s CO2 allowances
Gábor Baranyai, on behalf of Transparency International Hungary
Shortcomings and shortcuts: Sri Lanka’s environmental impact
assessments
Transparency International Sri Lanka
Voluntary carbon markets: successes and shortfalls
Thomas Marcello, Bloomberg New Energy Finance
Sectoral crediting: getting governance right from the beginning
Gernot Wagner, Nathaniel O. Keohane and Annie Petsonk,
Environmental Defense Fund
4.4 Climate change, corporate change: shifting business models towards
the climate agenda
David L. Levy, University of Massachusetts
4.5 Policy engagement: a missing link in corporate climate reporting
Ryan Schuchard and Laura Ediger, BSR
4.5.1
Colombia: measuring transparency policies and mechanisms in
public utilities
Alma Rocío Balcázar, Martha Elena Badel and Lorena Roa Barrera,
Transparencia por Colombia
4.6 Enabling green choices: ensuring consumers receive accurate,
actionable information on the climate impacts of their
consumption choices
Fred Pearce, author and Guardian columnist
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107
120
130
145
148
151
155
162
166
170
175
180
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8. viii
CONTENTS
4.7 Could corruption pose a barrier to the roll-out of renewable
energy in North Africa?
Nadejda Komendantova and Anthony Patt, International Institute of
Applied Systems Analysis
4.7.1
Spain: can incentivizing solar energy invite fraud?
Tono Calleja, in affiliation with Transparency International Spain
4.8 Preventing a resource curse fuelled by the green economy
Stefan Bringezu and Raimund Bleischwitz, Wuppertal Institute
4.8.1
Bolivia’s lithium: opportunities and challenges
Marco Octavio Ribera, Liga de Defensa del Medio Ambiente,
with Cecilia Requena, Transparencia Bolivia
4.9 Engineering the Earth: considering accountability and the last resort
Graeme Wood, the Atlantic
Part 5 Adaptation to climate change: building accountable sustainable
resilience
187
194
197
207
211
215
5.0 Adaptation to climate change: building accountable sustainable
resilience
Transparency International
217
5.1 Show me the money: ensuring equity, transparency and
accountability in adaptation finance
Richard J. T. Klein, Stockholm Environment Institute
220
5.1.1
5.1.2
Fast-start funding: is there an emerging parallel structure for
climate finance?
Rebecca Dobson, Transparency International
Climate change funds and development: how to ensure
transparency and access to information on funding streams
for adaptation
Adil Najam, Boston University
234
239
5.2 Promoting an effective and transparent use of funds through the
Adaptation Fund
Britta Horstmann, German Development Institute
246
5.3 Climate-proofing development: corruption risks in adaptation
infrastructure
James Lewis, Datum International
255
5.3.1
Climate change, infrastructure and corruption
Chandrashekhar Krishnan, Transparency International
United Kingdom
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9. CONTENTS
5.3.2
Climate-proofing and political influence in the Philippines
Segundo Romero, De La Salle University, and Aileen Laus,
The Asia Foundation, Philippines
5.4 Disrupting lives: climate migration and corruption
Ingrid Boas, University of Kent and Rebecca Dobson, Transparency
International
5.4.1
5.4.2
The plunder of Kenya’s forests: resettling the settlers and holding
the loggers accountable
Sheila Masinde and Lisa Karanja, Transparency International Kenya
Climate change adaptation and water integrity: a global challenge
to address local realities
Grit Martinez and Teun Bastemeijer, Water Integrity Network
ix
266
270
280
284
5.5 When disaster strikes: corruption and rapid response in
climate-related relief and recovery
Roslyn Hees, Transparency International
288
Part 6
295
6.0 Forestry governance: a key issue for climate change
Transparency International
297
6.1 Corruption: a root cause of deforestation and forest degradation
Patrick Alley, Global Witness
299
6.1.1
Climate change and corruption leave the world’s largest mangrove
forest in peril
Iftekhar Zaman and Manzoor-e-Khuda, Transparency International
Bangladesh
6.2 Governance in the world’s tropical forests: where will REDD+ land?
Jeffrey Hatcher and Luke Bailey, Rights and Resources Initiative
6.2.1
Bosawás: the ‘Lung of Central America’ under threat
Ana Murillo Arguello, Grupo Cívico Ética y Transparencia
6.3 Governance risks for REDD+: how weak forest carbon accounting
can create opportunities for corruption and fraud
Christopher Barr, Woods & Wayside International
6.3.1
6.3.2
Index
GLOBAL_CORRUPTION_CS4.indb ix
Hypothetical offsets: carbon trading and land rights in Papua
New Guinea
Sarah Dix, Transparency International Papua New Guinea
Is Norway rocking the REDD boat?
Manoj Nadkarni, Transparency International
312
315
327
329
345
348
351
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10. Illustrations
Figures
1.1 Global map of combined risk of hydro-meteorological disasters,
and water and/or food security 2011
18
1.2 Corruption Perceptions Index 2010
18
1.3 Maplecroft’s Climate Change Vulnerability Index 2010/11
19
1.4 Maplecroft’s Climate Change Vulnerability Index 2010/11, Africa
20
2.1 Participants from five types of industry organizations, and
environmental organizations, in the four stakeholders’ meetings in
the EU ETS review process
41
2.2 Participants from industry organizations and environmental
organizations in the four stakeholders’ meetings in the EU ETS
review process
42
2.3 Annual lobbying expenses, US
46
4.1 Jurisdictions with voluntary, corporate-level GHG accounting
programmes
114
4.2 Non-profit versus private sector share of voluntary OTC market,
2002–2009
156
4.3 Historical annual value of the voluntary carbon markets
156
4.4 Public services in the Colombian CDM portfolio
176
4.5 Pilot study of Colombian utility company transparency:
consolidated results
178
4.6 Barriers to investment in renewable energy in North Africa
189
4.7 Risks perceived as most serious in relation to RES investment in
North Africa
189
4.8 Risks perceived as most likely to happen in relation to RES investment
in North Africa
190
5.1 Overview of adaptation funding channels
222
5.2 Institutional structure of the Adaptation Fund
249
6.1 Estimated proportion of timber exports from 14 REDD countries
and Brazil that was illegal in 2007
301
6.2 Regional forest tenure distribution, 2008
320
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11. ILLUSTRATIONS
6.3 Framework of actions for ensuring effective climate change
adaptation and mitigation in forest areas
xi
322
Tables
1.1 Climate risk against per capita emissions
4
2.1 The role of city/municipal governments in adapting to climatechange-related disasters
52
2.2 Indicators for quality of participation in India
60
2.3 Indicator of the inclusion of environmental considerations in sector
reform processes in India
61
2.4 Departments involved in carbon polices in China
66
3.1 Governance dimensions in selected climate/environmental indices
95
4.1 GHG accounting principles
110
4.2 Colombian utility companies: Factors for corporate transparency,
indicators and what is assessed by the pilot study
177
4.3 Selected hot spots of future critical resource supply
(in alphabetical order)
202
5.1 Overview of issues related to equity, transparency and accountability
in the generation, governance, delivery and use of adaptation finance
223
5.2 Climate change hot spots and vulnerability to corruption
290
6.1 REDD-Monitor ‘Rainforest Risk’ tables, December 2008
302
6.2 Governance indicators in key forest-carbon-emitting countries
319
6.3 Levels and dimensions of good governance for REDD+
323
Boxes
1.1 Scientific basis of climate change
2.1 The global governance of climate change: a chronology
5
29
4.1 Major types of GHG accounting frameworks
108
4.2 Major sources of public financing for developing-country mitigation
121
4.3 HFC-23: a case of perverse incentives under the CDM
135
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12. Preface
Huguette Labelle, Chair, Transparency International
We stand at the threshold of a global challenge: climate change. Governance lies at
the heart of this challenge. Implemented with integrity and transparency, policies on
climate change will make it possible for people around the world to understand,
support and own the changes that will be required of them.
For more than 15 years the work of Transparency International (TI) has
demonstrated that, left unchallenged, corruption ruins lives, destroys livelihoods and
thwarts attempts at social and economic justice. The same risks apply to climate
change. Better governance is the solution, however, and it will be crucial to ensure
that the mitigation strategies and adaptation solutions that emerge at local, national
and international levels embrace participation, accountability and integrity. With so
much at stake, and with urgency of the essence, we must guarantee that climate
change policy is just, effective and transparent in its design and implementation.
The Global Corruption Report: Climate Change illustrates the immense demands of the
task we face. Solutions to climate change must build a bridge of trust between rich
and poor countries. At TI we have promoted a similar agenda with the adoption of
the UN Convention against Corruption, which reflects a broad, worldwide consensus
on our issue.
It is not only governments that are essential to mitigating and adapting to climate
change; the private sector also has a key role to play, as the main source of finance for
the green economy. TI looks forward to working in partnership with the business
community for fair and transparent solutions to climate change, which we see as
essential to an ongoing commitment to sustainability that comes with more transparent
business practices.
Finally, the climate change challenge brings us closer to others in civil society and
the research community. At TI, we are inspired by the many scientists and
environmental campaigners who, for decades, have led the charge to bring public
awareness and urgency to the issue of climate change. Starting our work in the spirit
of partnership, we believe that the pioneering efforts of environmental organizations
can be further strengthened by bringing in not just anti-corruption perspectives but
also those of human rights, humanitarian assistance, development assistance and
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13. PREFACE
xiii
consumer advocacy. Drawing together our diverse knowledge and experience can
ensure that, as well as tackling the climate challenge, we also move towards better
systems of governance and the promotion of sustainable and equitable development.
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14. Foreword
Kumi Naidoo, Executive Director, Greenpeace International
Greenpeace was founded on a prophecy from Canada’s First Nation peoples:
There will come a time when the Earth grows sick, and when it does a tribe will gather from all
the cultures of the world who believe in deeds and not words. They will work to heal it and they
will be known as the ‘Warriors of the Rainbow’.
This could just as well be applied to the work of Transparency International, and I
am pleased and honoured to introduce this volume of TI’s work on climate change.
An unfortunate fact of human nature is that, where there is money to be made,
corruption quickly follows. As we face the collective challenge of averting catastrophic
climate change and finding development paths that deliver a decent livelihood for all
while respecting ecological limits, civil society often finds itself pitted against those
who would put personal gain before the good of the planet.
Greenpeace’s vision of a sustainable society demands that power be exercised
fairly and that those in power be held accountable for their actions. Corruption
undermines this vision, by privileging those with power and money over other
citizens, allowing them to profit at the expense not only of the rest of us – but of the
planet itself.
Greenpeace’s experience has shown that corruption does not just drive climate
change but undermines economic and social development as well. Africa is one of
the richest continents in terms of natural resources and minerals, for example, but,
because of what has been termed the ‘resource curse’, it is the poorest continent when
it comes to providing for its own people, as revenues from the wealth of resources are
diverted and siphoned off.
Existing forms of corruption that can have a negative impact on efforts to mitigate
and adapt to climate change are not difficult to find, whether it is heads of government
depriving citizens of any share of their country’s resource riches; authorities failing
to take real action against corruption in the oil sector, despite losing billions of
dollars in revenue; or documented examples of private sector contributions to public
officials that result in clear conflicts of interest and interference in the due process of
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15. FOREWORD
xv
law. All such forms need to be duly considered in the development of a climate
policy that will have meaningful effects on the ground.
The Global Corruption Report: Climate Change comes at an important time. By mapping
risk in a number of rapidly expanding areas and bringing good governance to the
forefront of the climate change debate, the report clearly illustrates that decisions
made at the global level need to take account of the effects of corruption at all levels
in order to pave the way for future success in combating climate change.
Greenpeace is proud to support the first book to make the case comprehensively
that fighting for climate justice also means fighting the scourge of corruption.
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16. Foreword
Ashok Khosla, President,
International Union for Conservation of Nature (IUCN)
The everyday face of corruption – bribes, kickbacks, tax avoidance, selling influence
– is well known and has distorted economies, demoralized publics and torn asunder
the moral fabric of many a society.
Not as well known but perhaps even more destructive are the corrupt practices
that lead to the destruction of our natural resources and to the destruction of the
people – indigenous populations, tribals, villagers – on whose lands the material
resources and sinks of our by-products lie.
The greed and short-sightedness that have landed the world in its current
predicaments are in a real sense manifestations of an even deeper corruption in our
relationship with each other and with Mother Earth. At no time in history has there
been a greater need for a radical rethink of our social and economic goals.
The global climate is undergoing change that is unprecedented in its magnitude
and speed. Suddenly, we find ourselves in the fifth great extinction, with species
vanishing at rates not seen in millions of years. Soil, water and biological resources
that provide the basic supports to all life on the planet are rapidly degrading or
disappearing. And each year the gap between the needs of the people and the capacity
of the earth to meet these needs keeps on widening.
Who is to blame? And who can help bring about the transformations in our
institutions, technologies and, above all, our values that are needed to stabilize the
social and environmental systems that have got so out of balance?
In one sense, the answer to both questions is … everyone. But some have greater
responsibility than others, both for where we are and for bringing about the
reorientation needed in our societies and economies towards where we must go.
One group that must take a solid part of the responsibility for our current
predicament is the ‘professional’ or the ‘practitioner’, whose knowledge and expertise
has enabled the gap between the rich and the poor to grow to where it is today.
In some cases, this might be because of lack of information on the specific,
contextual issues to which the professional has been asked to respond. In other cases,
it has resulted from lack of knowledge or ‘science’ regarding the processes and
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17. FOREWORD
xvii
systems that need to be designed, where even the scientist has not been totally
successful in internalizing societal values into his or her enterprise. And much of the
time, it has been the result of a lack of wisdom – in turn partly because of narrow
perspectives engendered by specialized, discipline-based training and partly because
of the complexity of the systems we live with.
But ultimately, there is no gainsaying the role of greed and graft. One way to turn
back to creed and craft is to reintroduce the pledge that a professional makes to
society when graduating from training into professional practice. We now need an
extended Hippocratic Oath that promotes the idea that a practitioner’s duty is not
only ‘to do good’, but is a doubly extended professional commitment that covers the
need for integrity, excellence and relevance.
To set in place a well-designed professional system will require a high degree of
vigilance by peers – individuals and organizations – to ensure that development
professionals bring to their work the highest possible level of integrity, excellence
and relevance. For this effort, the role of civil society, which includes not only the
voluntary organizations and NGOs of today but also new kinds of organizations of
tomorrow, social enterprises, capable of combining public goals with private
motivation, becomes triply important. Global Corruption Report: Climate Change should
in no small part contribute to defining and strengthening that role.
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18. Acknowledgements
This Global Corruption Report on climate change governance is a credit to the
collaboration and dedication of its contributors, most notably its authors, whose
expertise and commitment have given a richness of perspective to the report.
As Transparency International continues to expand globally, we are grateful for
the country-level knowledge and insights of our National Chapters and the
contribution they have made by providing detailed and relevant country case studies.
We are grateful for the guidance of a group of distinguished experts who kindly
served on our Editorial Advisory Panel: Hansjörg Elshorst, Fiona Harvey, Saleem-ul
Huq, David Nussbaum, Hermann Ott, Frances Seymour, Shane Tomlinson, Kevin
Watkins, Jake Werksman and Ifthekar Zaman.
We are indebted to our colleagues at the Transparency International Secretariat
for their support and insight. We particularly would like to thank the Secretariat’s
senior management team, and the Transparency International board, as well as Lisa
Elges, Michel Gary, Manoj Nadkarni, Farzana Nawaz, Zoe Reiter and David van
der Zwaag. The Global Corruption Report team would like to express its gratitude to
Daniel Abreu for lending his enthusiasm and climate change expertise to the early
stages of the project, and Rosie Pinnington and Leah Good for their critical assistance
in the final weeks of the report’s production.
With the completion of this book, the team is saying goodbye to two valuable
editors. We wish to express our huge gratitude to Rebecca Dobson, who contributed
to the report with dedication and good humour for the last three years. Her quick
thinking, camaraderie and boundless curiosity were enormous assets to the team and
she will be deeply missed. Dieter Zinnbauer, chief editor of the Global Corruption
Reports 2008 and 2009, also had a fundamental hand in shaping the current report,
and pitched in well beyond the call of duty. While he will continue to sit right next
door, we’ll nevertheless miss his creative approach and his untiring desire to uncover
the newest angles in the corruption field.
The hard work and recommendations of our external editors have added
tremendously to the quality of the report. Mark Worth’s polishing of the text added
eloquence and sharpened nuance, and copy-editor Mike Richardson worked against
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19. ACKNOWLEDGEMENTS
xix
the clock to bring consistency and coherence to our manuscript. We are also thankful,
as ever, for astute and perceptive editorial advice and oversight from Robin Hodess.
This year we are very happy to be working with our new publisher, Earthscan,
whose team has provided timely, patient and expert assistance throughout the
process. We would especially like to thank Nick Bellorini, Veruschka Selbach, Nick
Ascroft and Claire Lamont for their generous support.
We would also like to acknowledge a number of individuals from various
backgrounds who have employed their expert knowledge and skills to the enormous
benefit of the report: Alexios Antypas, Francisco Ascui, Richard Baron, Monika
Bauhr, Shikha Bhasin, Tim Bittiger, Jason J. Blackstock, Bernhard Bodenstorfer,
Duncan Brack, Rob Bradley, Curtis Brainard, Adam Bumpus, Michelle Chan, Ian
Christoplos, Jim Coburn, Simone Cooper, John Crabtree, Delegation of the
European Union to Papua New Guinea, Joanna Depledge, Al-Hamndou Dorsouma,
Alan Drew, Navroz K. Dubash, Sebastien Duyck, Tejas Ewing, Estelle Fach, Pedro
Faria, Dora Fazekas, Jorge Nunez Ferrer, Ivana Gazibara, Arunabha Ghosh, Tamra
Gilbertson, Michael Gillenwater, Ruth Golding, Robert Lane Greene, Alberto
Guijarro, Lois Guthrie, Mohamed Hamza, Erica Harper, Barbara Hogenboom,
David Huberman, Alice Jaraiseh, Maria Ivanova, Patricia Kameri-Mbote, Nalin
Kishor, Harvey F. Kline, Andrea Lampis, Magda Lanu, Merrin Layden, Robin
Leichenko, Michelle Leighton, Martin Lichtl, Simone Lovera-Bilderbeek, Julio
Lumbreras, Michael MacCracken, Darina Malova, María Piedad Martín, Grigorij
Mesežnikov, Marcus Moench, John Mulrow, Albert Mumma, Robert Nasi,
Siddharth Pathak, Philipp Pattberg, Leo Peskett, Argentino Pessoa, David Proverbs,
Gabriela Quimson, Aminur Rahman, Oscar Reyes, James Risbey, Victor Samwinga,
Lisa Schipper, Deborah Seligsohn, Winston Shakantu, Anju Sharma, Heidi
Siegelbaum, Martin Stadelmann, Wolfgang Sterk, Ian Tellum, Frank Venmans,
Erika Weinthal, Laura Williamson, Glenn Wiser, Yin-fang Zhang, Darren Zook,
Uchita de Zoysa and Samer Zureikat.
And to those for whom the details are never lost, we would like to thank our
tireless and meticulous fact-checkers: Jennifer M. Cruz, Natacha Draghi, Arwen
Fleming, Jason Ariel Grullon, Gábor Halmai, Péter Király, Sofia Lindholm, Ariana
Mendoza, Andrej Nosko, Leila Peacock and Katherine Stecher.
We continue to receive generous pro-bono libel guidance from Covington and
Burling. This year we are particularly grateful for the work of Enrique Armijo, Jason
Criss, Laura Flahive Wu, Simon Frankel, Mali Friedman, Eric Hellerman, Gregory
Lipper, Candice Plotkin, Eve Pogoriler, Robert Sherman, Lindsey Tonsager and
Stephen Weiswasser.
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20. xx
ACKNOWLEDGEMENTS
Finally, we would like to express thanks to all of our donors who contribute to the
Global Corruption Report. Particular thanks are due to the German Federal Ministry for
Economic Cooperation and Development (BMZ) and the European Investment
Bank, who continue to give generous support. We would also wish to thank the
Ministry of Foreign Affairs of Finland, the Canadian Agency for International
Development (CIDA) and Swedish International Development Cooperation Agency
(Sida) for their contribution to TI’s core activities, including the report.
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21. Acronyms and
abbreviations
3C
AAU
AFB
AWG-KP
AWG-LCA
BaU
BAWIN
CAIT
CCAP
CCS
CCVI
CCX
CDM
CDP
CEA
CER
CfRN
CIFs
COP
CoST
CPI
CPWC
CRS
CSP
CTF
DAC
DNA
DOE
GLOBAL_CORRUPTION_CS4.indb xxi
Combat Climate Change
assigned amount unit
Adaptation Fund Board
Ad Hoc Working Group on Further Commitments for Annex 1
Parties under the Kyoto Protocol
Ad Hoc Working Group on Long-term Cooperative Action
business-as-usual
Bangladesh Water Integrity Initiative
Climate Analysis Indicators Tool
Center for Clean Air Policy
carbon capture and sequestration
Climate Change Vulnerability Index
Chicago Climate Exchange
Clean Development Mechanism
Carbon Disclosure Project
Central Environmental Authority
certified emission reduction
Coalition for Rainforest Nations
Climate Investment Funds
Conference of the Parties
Construction Sector Transparency Initiative
Corruption Perceptions Index
Co-operative Programme on Water and Climate
Creditor Reporting System
concentrated solar power
Clean Technology Fund
Development Assistance Committee
designated national authority
designated operational entity
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22. xxii
ACRONYMS AND ABBREVIATIONS
EEs
EFC
EIA
EITI
EPA
EPI
ETS
EU
FDI
FMA
FSC
FTC
GAO
GEF
GHG
GIAC
GIS
GS
ha
HFC
HFC-23
ICLEI
IEA
IEE
IEG
IIED
IOM
IPCC
IRR
ISO
IUCN
JI
JISC
LDCF
LDCs
LED
MARGE
MDB
executing entities
Ethics and Finance Committee
environmental impact assessment
Extractive Industries Transparency Initiative
Environmental Protection Agency
Environmental Performance Index
Emissions Trading Scheme
European Union
foreign direct investment
Forest Management Agreement
Forest Stewardship Council
Federal Trade Commission
Government Accountability Office
Global Environment Facility
greenhouse gas
Global Infrastructure Anti-Corruption
Green Investment Scheme
Gold Standard
hectare
hydrofluorocarbon
Hydrofluorocarbon-23
Local Governments for Sustainability
International Energy Agency
initial environmental examination
international environmental governance
International Institute for Environment and Development
International Organization for Migration
Intergovernmental Panel on Climate Change
internal rate of return
International Organization for Standardization
International Union for the Conservation of Nature
Joint Implementation
Joint Implementation Supervisory Committee
Least Developed Countries Fund
least developed countries
light-emitting diode
Mediterranean Area Renewable Generation Estimator
multilateral development bank
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23. ACRONYMS AND ABBREVIATIONS xxiii
MIE
MOP
MRV
MW
NAMA
NAP
NAPA
NGO
NIE
OCHA
ODA
OECD
OECD-DAC
OIES
OTC
PACS
PFCs
PGM
PNG
PPCR
PPRC
PV
QELRO
REDD
REDD+
RES
SBI
SBSTA
SCCF
SF6
SIFORCO
SPA
STAR
SWIFT
TI
TWh/y
UN
GLOBAL_CORRUPTION_CS4.indb xxiii
multilateral implementing entity
Meeting of the Parties
measuring, reporting and verification
megawatts
nationally appropriate mitigation action
national allocation plan
national adaptation programme of action
non-governmental organization
national implementing entity
Office for the Coordination of Humanitarian Affairs
official development assistance
Organisation for Economic Co-operation and Development
OECD Development Assistance Committee
Oxford Institute for Energy Studies
over-the-counter
Project Anti-Corruption System
perfluorocarbons
platinum group metal
Papua New Guinea
Pilot Program for Climate Resilience
Projects and Programme Review Committee
photovoltaic
quantified emissions limitations and reduction obligation
Reducing Emissions from Deforestation and Forest Degradation
Expanded version of REDD (see section 6.2)
renewable energy sources
Subsidiary Body for Implementation
Subsidiary Body for Scientific and Technological Advice
Special Climate Change Fund
sulphur hexafluoride
Société Industrielle et Forestière du Congo
Strategic Priority on Piloting an Operational Approach to
Adaptation
System for Transparent Allocation of Resources
Society for Worldwide Interbank Financial Telecommunication
Transparency International
terawatt-hours per year
United Nations
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24. xxiv ACRONYMS AND ABBREVIATIONS
UNCAC
UNDP
UNECE
UNEP
UNFCCC
UNHCR
UNODC
USAID
VVM
WHO
WIN
WRI
WTO
WWC
United Nations Convention against Corruption
United Nations Development Programme
United Nations Economic Commission for Europe
United Nations Environment Programme
United Nations Framework Convention on Climate Change
UN High Commissioner for Refugees
UN Office on Drugs and Crime
United States Agency for International Development
Validation and Verification Manual
World Health Organization
Water Integrity Network
World Resources Institute
World Trade Organization
World Water Council
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25. Executive Summary
Transparency International
Climate change is arguably the greatest governance challenge the world has ever
faced. Addressing it requires a degree of urgency, trust, cooperation and solidarity
that tests the limits of conventional mechanisms and institutions to manage public
goods. It requires transformational shifts in our economies that may eventually
dwarf the dramatic changes brought on by the Industrial Revolution. Climate
change affects livelihoods and challenges lifestyles. It exerts immense pressure on
the social and political fabric of communities around the world, against the
backdrop of tremendous uncertainty about the precise scope and pace of the next
steps that will be taken to remedy it, particularly at the global level.
A robust system of climate governance – meaning the processes and relationships
at the international, national, corporate and local levels to address the causes and
effects of climate change – will be essential for ensuring that the enormous political,
social and financial investments by both the public sector and the private sector
made in climate change mitigation and adaptation are properly and equitably
managed, so that responses to climate change are successful. The stakes are high: we
must invest significantly to achieve a low-carbon future, and we must make sure this
investment is effective. Despite difficulties in reaching consensus at the international
level, states, companies and civil society actors are converging around the need to
establish clear rules and compliance mechanisms for addressing climate change.
Good governance of the climate can enhance the process, making it more transparent,
accessible and equitable for all.
Climate change is not just a challenge to established approaches to governance,
however; it also transcends established typologies of corruption. Corruption is
defined by Transparency International as the abuse of entrusted power for private gain.
Entrusted power is not only the power a citizen confers to a public office holder. It is
the power that future generations have vested in all of us, in our stewardship role for
the planet. Likewise, abuse for private gain goes beyond corruption in the forms it so
often takes – the misappropriation of funds, bribery in the awarding of contracts,
and nepotism, all of which undermine good climate governance – and extends to
new arenas. These include the distortion of scientific facts, the breach of principles
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26. xxvi EXECUTIVE SUMMARY
of fair representation and false claims about the green credentials of consumer
products – evidence of which is documented in this report. Such practices can be
devastating in a policy arena in which uncertainty abounds and trust and cooperation
are essential.
Why is corruption, in particular, a risk in addressing climate change? As the Global
Corruption Report explores at length, the efforts to prevent and respond to climate
change will have an enormous price tag. Where huge amounts of money flow
through new and untested financial markets and mechanisms, there is always a risk
of corruption. Some estimate total climate change investments in mitigation efforts
alone at almost US$700 billion by 2020. Public investments of no less than US$250
billion per annum will eventually flow through new, relatively uncoordinated and
untested channels. In addition, pressure already exists to ‘fast-track’ solutions, further
enhancing the risk of corruption.
Corruption risks are also high because of the level of complexity, uncertainty and
novelty that surrounds many climate issues. Essential concepts, such as what should
count as a forest, or how to establish additionality (meaning whether projects could
happen in any case without support), are still being debated. Rules for geoengineering,
perhaps the most risky and consequential human intervention in our biosphere, are
still largely absent. New tools to measure the environmental integrity of carbon
offsets are relatively untested. Early evidence presented in this report suggests that
there are many regulatory grey zones and loopholes that are at risk of being exploited
by corrupt interests. Careful monitoring, quick learning and an active approach to
closing entry points for corruption are essential to ensure that strong governance
enables the success of these new tools and instruments at this most critical stage.
Another aspect of climate governance that demands urgent attention is the
inequality of the current processes for individuals and groups most directly affected
by climate change. Contributions to the Global Corruption Report shed light on those
most adversely affected by climate change: indigenous and rural poor communities
in remote locations, the urban poor living in precarious settlements, and displaced
persons who require resettlement. All these groups share commonalities. They bear
the brunt of the effects of climate change; they are meant to be the main beneficiaries
of adaptive action; and yet they are usually the most marginalized voices in the
political system. This starkly highlights the need for accountable climate governance.
An overarching message of the Global Corruption Report is that a dramatic strengthening
of governance mechanisms can reduce corruption risk and make climate change policy more effective and
more successful. The quality of climate governance – the degree to which policy
development and decisions are participatory, accountable, transparent, inclusive and
responsive, and respect the rule of law – will help determine how well it addresses
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27. EXECUTIVE SUMMARY xxvii
inherent corruption risks. The report brings together more than 50 recognized
experts to present the first comprehensive analysis of corruption and climate change,
and it includes a set of policy recommendations.
Making climate governance work: designing processes for
accountability and integrity
The scale and complexity of the climate change challenge and the financial
investments required to make it work mean that a well-coordinated system of
accountable decision-making is essential.
Important decisions on climate change are taken in many institutional
settings – more than the spotlight on some high-profile international
meetings would suggest
Overwhelming attention to high-profile intergovernmental meetings on climate
change makes their outcomes seem uniquely critical. Although this arena is extremely
important, action is dispersed across a multitude of fora and actors from international
to local level, reflecting the extraordinary scope and diversity of climate policy issues.
There are currently more than 500 multilateral environmental agreements, many
relevant to climate change. Important climate decisions are not deliberated and
decided upon only by conferences of state parties in Copenhagen or Cancún. The
overall response to climate change is perhaps even more critically shaped in many
national and regional venues, from Beijing, Brussels and Brasilia to Delhi and
Washington. Many new hybrid initiatives that link public and private stakeholders
play a role, and so do cities and local governments that can notch up the standards of
commitments – or water them down.
The extent of transparency, accountability and inclusive participation varies
widely across these policy-making fora. Standards need to be consistently high to
pave the way for sound climate policies that avoid the many potential risks of policy
capture and forum-shopping, regulatory arbitrage and hold-ups that are associated
with such a dispersed governance landscape and that all have the potential to
undermine effective global action.
The attention and record attendance that a few key climate policy
processes enjoy make it easy to overlook persistent disparities in
influence, even in these settings
High visibility does not equal effective transparency and attendance does not equal
proportionate influence. Transparency practices for the United Nations Framework
Convention on Climate Change (UNFCCC), the most visible forum for climate
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28. xxviii EXECUTIVE SUMMARY
policy-making, lag behind established standards practised in other settings. Likewise,
record turnout and attention for the Copenhagen summit and a handful of other
headline events cannot mask persistent disparities in representation. In Copenhagen,
the top five polluting countries were able to field more than three times the number
of official delegates than the five countries considered to be most affected by climate
change. By 2009 the combined number of registered observer organizations to the
UNFCCC from Canada, the UK and the US had reached more than 400, while on
the developing country side only Brazil, China and India managed to register more
than 10 groups. In sum, high-profile international venues for climate policy-making
may garner sufficient attention and raise prospects for better climate governance
instruments, but there is a long way to go to achieve an effective and inclusive voice
for all stakeholders.
The lobbying landscape is diversifying, and the associated risk of undue
influence is higher than ever
The advent of green industries as lobbyists, as a counterweight to lobbying by energy
and other sectors dominated by the need for fossil fuels, might suggest that by now
a rather balanced spectrum of interests underpins deliberation about climate policies.
As the Global Corruption Report documents, this is not the full picture. At US national
level, oil and gas interests alone outspent the clean energy sector by a factor of eight
in lobbying in 2009. In the European Union, business groups contributed more than
twice the number of policy positions to an important climate policy deliberation
process in 2004 than environmental groups.
Even an equal presence of both green and brown lobbying does not guarantee
climate policies in the public interest. As the report shows, double policy capture
may occur when a lack of action on polluters exists alongside strong support for
influential green interests. Mandatory lobbying registries are still not required in the
majority of Organisation for Economic Co-operation and Development (OECD)
countries, however, and the quality of internal and external disclosure by businesses
on their level of public engagement and activities related to climate change remains
mixed.
Elsewhere in the world, the matrix of interests and influence does not bode well
for balanced consideration of all interests. In China and India, for example, the
actors in the fossil fuel and power sector likely to lose most from progressive climate
policies are often large, state-controlled conglomerates with close linkages to the
highest echelons of political power. All this requires that close attention be paid in
order to avoid policy capture and results that serve the few rather than the many,
which would be bad for accountability and bad for the planet.
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Mitigation: strategies for reducing carbon emissions
Mitigation efforts aim to slow climate change by reducing the amount of greenhouse
gases (GHGs) emitted globally, or increasing the capacity to capture emissions in
natural sinks, such as forests, or through technological innovation. Leading mitigation
approaches include the establishment of carbon markets, mandated emission
standards and energy efficiency policies, and voluntary initiatives to move towards a
low-carbon economy. Even though some of these approaches are at relatively early
stages of development, adequate governance safeguards should be put in place from
the outset to ensure that they can best achieve their objectives.
A robust system for the measuring, reporting and verification (MRV) of
emissions is crucial to transparency, and ultimately to the success of
mitigation strategies
Accurate MRV is critical, not only to reducing GHG emissions at the national level
but also to enable investors to make informed decisions about business sustainability.
Although many methods and initiatives are currently in place to measure, report and
verify emissions, more resources and training are needed to improve this information.
In developing countries, a lack of technical capacity or financial resources makes the
development of ongoing emissions data collection difficult, and a lack of expert
reviewers may mean that formal reporting on national emissions is not subject to
sufficiently robust verification.
Without stringent MRV requirements in developing and developed countries
alike, the risks include incentives for industries to exaggerate their baseline emissions
data so as to make ‘reductions’ easier at a later date. The use of unreliable emissions
data in carbon markets can result in the over-allocation of carbon credits, making
efforts to reduce emissions less ambitious than they ought to be. The result is
mitigation strategies that do not reduce emissions and that support the market in the
short term only through possible windfall profits for some major polluters, with the
climate losing out.
The need to measure, report and verify extends beyond emissions, as the entire
industry emerging around the green economy needs to establish the legitimacy of its
no- or low-carbon growth credentials. While government attempts to support green
technologies are laudable, regulatory oversight must keep pace with expanding
industrial activity, as financial incentives have already led some project developers to
falsely claim projects to be finished in order to reap heightened profits.
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30. xxx
EXECUTIVE SUMMARY
As a critical mechanism for mitigation, carbon markets need safeguards
to reduce the risk of corruption, as well as to ensure their sustainability
and capacity to reduce greenhouse gas emissions
Carbon markets have been adopted in a number of regions and countries as a method
for reducing GHG emissions, and the value of leading carbon markets has now
reached some US$144 billion. These initiatives hold the potential to reduce
emissions, but they are also politically created and publicly funded markets trading
in an intangible commodity.
The European Union’s Emissions Trading Scheme (ETS) has shown that carbon
markets are susceptible to undue influence from vested interests, which in the case of
the ETS may have contributed to the over-allocation of carbon permits. The result
was windfall profits of €6–8 billion for Europe’s four largest power producers.1
Weak governance of these critical markets can create a lose-lose scenario, in which
over-allocation of permits and the resulting low carbon prices provide a disincentive
for business to find new low-carbon means of production, and potentially can bring
about market collapse.
The path to a green economy should create opportunity for developing
countries by addressing governance concerns directly; the risk if it does
not is that global inequalities will be sustained and deepened
The roll-out of renewable energy sources, such as solar and wind power, is crucial to
mitigation and requires considerable private investment. According to a recent study
in the North Africa region, however, almost 70 per cent of the potential investors
interviewed considered regulatory risk, including corruption, to be likely – and a
serious impediment to investment.
Significant changes will need to be introduced to bring about a viable low-carbon
infrastructure. Many countries believed to be characterized by weak governance or
corruption will have a central role to play in this transition. For example, some of the
new land required for biofuels, which are slated to comprise 10 per cent of global
transport fuels by 2030, is being sought in countries that rank below global averages
in the control of corruption, the rule of law and political stability indicators.
Not only land but also minerals such as lithium (demand for which is expected to
grow dramatically with the coming of electric cars, for example) are often found in
countries that lack strong governance and integrity systems. As these natural resources
become crucial to the low-carbon economy, steps must be taken to guarantee
transparency in the flows of money that governments receive for access to them. The
drive to prevent climate change should not result in a new resource curse, a green
resource curse, condemning poorer countries to miss the opportunity for economic
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31. EXECUTIVE SUMMARY xxxi
development while others profit from their wealth in the growth of the green
economy. Existing standards such as the Extractive Industries Transparency Initiative
(EITI) can play an important role in this regard.2
Building effective adaptation to climate change
Strengthening citizen participation is essential to adaptation
governance, as adaptation will take place in countries with high
corruption risks
Systems need to be put in place to make sure that the planning and prioritization of
projects is transparent and encourages local ownership and long-term sustainability
by ensuring the participation of those most directly affected. The introduction of
‘direct access’ to funds through the Kyoto Protocol Adaptation Fund requires that
national entities will need to be established for managing adaptation funds, and that
they are equipped with the resources and capacity to fulfil their fund allocation and
monitoring role. To date, however, only US$200,000 has been designated per
country for the development of national adaptation programmes of action (NAPAs)
in the least developed countries, and it is still unclear how much money will be
provided for capacity-building.
In addition, effective adaptation governance ultimately also depends on the
functioning of other checks and balances, including courts, law enforcement and a
vigorous media and civil society. Broader systems of governance need to be
strengthened in many countries where adaptation is needed most. None of the 20
countries most affected by climate change score higher than 3.6 on the Corruption
Perceptions Index, in which 0 is extremely corrupt and 10 is very clean. Strengthening
adaptation processes is essential, and yet it must be a part of broader governance
reforms.
Oversight at the implementation stage is critical to the success of
adaptation programmes
Much adaptation to climate change will consist of large-scale infrastructural
development, such as enhancing flood control systems or protecting drinking water
from salt water infiltration. In construction costs alone, corruption is currently
estimated to cost the developing world some US$18 billion a year. Adaptation
without oversight presents a twofold risk of diverted funds and substandard work,
however, which may put populations at even more risk of climate extremes. In
Turkey, where an earthquake killed 11,000 people in 1999, a half of all structures
failed to comply with building regulations. Important lessons can be learnt from the
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32. xxxii EXECUTIVE SUMMARY
humanitarian and development sectors to enhance understanding of how to avoid
corruption undermining adaptation efforts, as well as from existing multi-stakeholder
initiatives such as the Construction Sector Transparency Initiative (CoST).3
Strengthening coordination, mutual accountability and operational
transparency in the governance of adaptation funds is essential to
building the trust needed for sustainable climate change policy
The disbursement of adaptation funding extends across various bilateral and
multilateral streams, including six specific bilateral climate funds, two World Bank
Climate Investment Funds and the UNFCCC and Kyoto Protocol funds, including
the new Green Climate Fund. All have diverse governance systems and different rules
of engagement, making accountability to those affected by climate change rather
complicated. Nearly a half of US pledges for fast-start funding made in Copenhagen
and Cancún are to be routed through the World Bank in 2011, and therefore subject
to its governance frameworks.
An effective common reporting framework for adaptation funding is essential for
tagging and tracking funds that come through the system. At present it remains
difficult to distinguish between official development assistance and dedicated ‘new
and additional’ adaptation funding. Fixed criteria for ‘new and additional’ funds will
ease measurement and reduce the risks of manipulation. They will also allow the
clarity that is necessary for development and adaptation funding to have an impact
that is coordinated and of greatest benefit to those most harmed by changes to
Earth’s climate.
A focus on forestry
Forests play a pivotal role in climate policy, yet a track record of
entrenched corruption in the sector demands preventative and proactive
action
Enhancing forestry governance is a priority of the highest order to mitigate climate
change. High international demand for timber, weak land ownership rights and
marginalized indigenous communities present singular challenges to accountable
and sustainable forestry. Each year US$10–23 billion worth of timber is illegally
felled or produced from suspicious origins. These practices are aided by legal
loopholes and deeply engrained corruption schemes, whereby local power brokers
use forest assets not only for personal enrichment but also for buying political
support or influence.
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33. EXECUTIVE SUMMARY xxxiii
These factors need to be addressed early on for REDD (Reducing Emissions
from Deforestation and Forest Degradation), as the major international initiative to
leverage forest policies for climate change. REDD readiness programmes (pledges
currently amount to around US$3.5 billion) have the potential to address some of
the national-level capacity loopholes, but are not a panacea for addressing corruption
in the sector.
Robust systems for monitoring and reporting are essential to reducing
corruption risks and ensuring the sustainability of forest projects
Funds of up to US$28 billion a year are expected to flow once REDD programmes
are fully operational. As has already been observed in mitigation initiatives such as
the UN Clean Development Mechanism (CDM), robust monitoring mechanisms
have to be put in place in order to avoid the inappropriate validation of projects, the
verification of fictitious projects and the overestimation, double-counting or
fraudulent trade of carbon credits. These risks are particularly salient for forestry.
Oversight in the forest sector is difficult, since much activity takes place in remote
areas. Ensuring the sustainability of forests and the security of carbon credits means
that measures need to be put in place to ensure that deforestation does not begin
once the financial benefits of REDD have been realized (permanence), or relocate to
other areas where REDD programmes are not in place (leakage).
Public participation at the local level is essential to the success of forestry
governance
Forest communities’ full participation in the REDD process is crucial to make sure
that they reap the benefits of the REDD programme and that finances to curb
deforestation are not diverted. Putting local communities in charge of managing
their forests, or at least giving them a big role in this process, can lead to improved
forest conditions and local livelihoods. Forest communities are already becoming
victims of fraud as carbon brokers and project developers have moved aggressively to
secure carbon rights through non-transparent negotiations with government officials.
Increased funding for forests will need to be matched with strong coordination and
oversight in order to ensure that the money reaches the communities that need it yet
does not increase incentives for corruption.
Actions for sustainable climate governance
The Global Corruption Report clearly demonstrates that better climate governance will
ultimately require the genuine commitment and cooperation of all stakeholders,
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34. xxxiv EXECUTIVE SUMMARY
from governments and business to non-governmental organizations (NGOs),
scientists and society at large. Moreover, integrity in climate policy requires an entire
system of interlocking checks and balances. Key ingredients and areas for action
include the following.
Generating and making publicly available accurate information
This is in terms of who is responsible for what emissions, who is advocating for what
policy, which money goes where and for what, what sized carbon footprint should
accompany consumption or investment choices, and so on. This kind of disclosure
is essential to assign responsibilities more clearly and improve accountability among
stakeholders.
Tracking, benchmarking and comparing the capacity and performance of
emitters, regulators, funders and governments
Benchmarking diagnostics generate invaluable pressure for accountability, help
detect red flags for corruption and identify priorities for governance reform. Some
early examples are described in this report and illustrate how important these
mechanisms can be, showing, for example, underperformance on the part of key
verification providers in carbon markets and the lack of monitoring capacity for
forest carbon issues.
Matching capacity at all levels to the scale of the challenge
A mismatch in enforcement or monitoring capacity means that on-site spot checks
are too infrequent – or even completely absent – to be a deterrent, and effectively
sanctions corrupt practices. A mismatch between the supply and demand of
specialized skills means that key experts end up wearing multiple hats and the
potential for conflicts of interests grows. A mismatch between financial flows and
the capacity for financial management opens the door to corruption.
Anchoring climate governance firmly in existing frameworks for
integrity and accountability
Climate governance must draw on a wide range of existing accountability mechanisms.
It can invoke and support the UN Convention against Corruption; it can use and
help to develop anti-corruption mechanisms, from ombudsmen to whistleblowing
mechanisms; and it can engage with and foster the growing range of social
accountability initiatives, from social audits to collaborative monitoring, that are
springing up at community level.
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35. EXECUTIVE SUMMARY xxxv
A major scaling up of investment and considerable economic change awaits us as
a result of climate change. We must accompany this process with the best possible
governance we can, to ensure the equitable outcomes we need for the planet and for
future generations. Based on the findings of the Global Corruption Report, Transparency
International makes the following key proposals to climate stakeholders.
Recommended actions for governments
1 Incentivize and design key climate policy instruments so as to promote
independence and reduce conflict of interest
Governments need to make sure that relevant oversight bodies are staffed by salaried
professionals, with technical expertise, who have proven themselves to be free from
conflicts of interest stemming from personal stakes in carbon markets, offset or
adaptation projects or additional representative roles in climate negotiations.
Governments should also push for project validators to be hired and paid for their
services through a centralized fund rather than by project developers. Environmental
agencies and government watchdogs cannot act effectively if they offer services to, or
have stakes in, the very same bodies they are meant to regulate. The financial crisis
showed us that misaligned incentives and conflicts of interest in rating agencies, for
example, can bring markets to the brink of collapse. A repeat of this debacle in the
carbon markets would spell both financial and climate disaster.
2 Ensure transparency in flows of funding for mitigation and adaptation
State parties to the UNFCCC must develop standard criteria for reporting on the
financing of projects. Monitoring, reporting and evaluation systems need to be
adaptable to various contexts, while enabling systematic reporting.
International finance mechanisms should provide clear and consistent guidance to
national implementing agencies on the required standards for managing adaptation
in their countries, from planning processes through to the management of funds, the
implementation of projects and final evaluation. States need to ensure that mitigation
and adaptation funds also increase national monitoring and reporting capacity. In
the context of adaptation, countries with strong national systems should then be in a
position to access financing directly from international financing mechanisms in
order to fulfil adaptation activities, with an emphasis on domestic accountability –
from governments to people – in the determination of funding priorities.
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3 Monitor and oversee national climate policy and projects effectively
Government subsidies and support for the development of low-carbon infrastructure
must be matched by strong oversight and regulatory institutions in order to protect
public funds against fraud, particularly when the introduction of infrastructure is
technically complex and requires specialized knowledge. National entities should
exist with the capacity to monitor the disbursement and implementation of funds
and apply tools for identifying corruption in the implementation of projects. They
should also create space for independent civil society input into monitoring efforts.
4 Treat anti-corruption safeguards as integral elements in the design of
adaptation and mitigation action
It is essential to build checks and balances into the core structures of climate policies
as and when they are built. If the financial crises of recent years offer a central lesson,
it is that oversight and regulation find it very difficult to play catch-up and restore
order after markets have collapsed and trust has evaporated amid fraudulently
inflated asset bubbles. Getting oversight and regulations for the carbon market
correct from the start is essential in order to avoid a similar fate. Likewise, the green
economy provides a boon for some commodities, from lithium in Bolivia to biofuels
in Indonesia and to land for solar energy projects in North Africa. Putting in place
public financial management and sound oversight before the revenues start flowing
is essential for those countries that stand to profit. The opportunity offered by the
green economy must not transform into a green resource course, similar to the
pernicious effect that failed governance has had on oil-rich countries.
5 Step up policy coordination and bring key departments into line on climate
change issues
Inconsistencies, ambiguities and loopholes in conjunction with poor policy
coordination across departments present potential opportunities for exploitation in
terms of arbitrage and corruption. Climate change is the archetypical cross-cutting
issue and naturally concerns many parts of the executive arm of government; not
everyone is walking in the same direction, however. Climate policies and governance
are often inconsistent and ill-coordinated at best and subject to explicit interdepartmental power struggles at worst. Strong leadership, clearly assigned
responsibilities and vigorous inter-agency coordination are key, and they need to be
strengthened everywhere so as to corruption-proof climate governance.
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37. EXECUTIVE SUMMARY xxxvii
6 Build robust mechanisms for representation and public engagement that can
cope with the increased public demand
Climate change has entered public consciousness to stay. The ensuing upsurge in
attention and engagement is understandable, since everyone is a stakeholder – and a
custodian of future generations and our common planet. The 90,000 comments
received on a key UNFCCC report and record turnouts for the global climate
change summits have strained established mechanisms for consultation and
engagement to their limit, however. More educational outreach and capacity-building
are required if people are to contribute meaningfully, and if governments are to
process, channel and aggregate all this attention.
Recommended actions for business
7 Be a powerful voice in climate policy through open engagement and
disclosure; it is an essential plank of corporate citizenship and a marker of
commitment to climate change
Reporting carbon footprints and carbon policies is not enough. The role of businesses
in shaping the response to climate change goes beyond their own emissions.
Businesses fight for their interests with lobbying powers that no other interest group
can match in scale and sophistication, and they do so increasingly on issues related to
climate change. Companies must disclose their climate policy engagement. As
important shapers of policy outcomes, they bear responsibility to account for their
positions, for the coalitions they participate in and the causes and groups they
support. At the international level, business can also play an important part in
demanding policy frameworks that set ambitious, fair and sustainable parameters,
and should do so openly and in cooperation with other relevant stakeholders.
Once companies know what is expected of them, they are in a position to put
more productive energy into how to get there, including disclosing their efforts.
8 While going green, adhere to strong compliance, an anti-corruption regime
and best corporate governance practice
Business opportunities in adaptation or mitigation activities, such as large-scale
infrastructure construction projects or public tenders in other fields, pose many
well-known corruption challenges for the private sector. Various tools and action
templates to counter these risks effectively are available, from internal training and
transparent compliance systems to joint action initiatives such as integrity pacts, the
EITI and the CoST to stamp out corruption in specific high-risk situations.
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38. xxxviii EXECUTIVE SUMMARY
Businesses need to embrace these tools firmly and transfer them to their climatechange-related activities.
Given the high percentage of mitigation costs that will have to be borne by
companies participating in the financial markets, the time is right to embed the
highest standards for transparency and accountability in these emerging market
mechanisms.
9 Commit ample resources to transparency, the disclosure of carbon emissions
and green climate action
Good internal oversight mechanisms must include transparency. Major companies
are now reporting systematically on emissions, but this reporting needs to be easily
interpretable by non-expert groups and mainstreamed into sustainability reporting
in order to reach the widest group of stakeholders.
Reporting on green action can also extend to other governance areas, such as
internal codes of conduct. Such reporting should include the involvement of the
board of directors, be set against benchmarks that measure progress over time, be
accessible to stakeholders and the broader public when applicable and include
independent processes of verification.
Accurate and publicly accessible reporting needs to be accompanied by a strong
commitment not to abuse marketing techniques for ‘greenwashing’ products in an
attempt to make them more palatable to climate-change-aware customers. Lifestyle
changes and appropriate consumer choices are critical to avoiding a climate crisis.
Companies that misrepresent the climate impact of their products fatally undermine
this information flow, stall progress in moving towards a climate-friendly economy
and, ultimately, erode consumer trust.
Recommended actions for civil society
10 Undertake independent oversight and monitoring in terms of governance
and corruption risk in climate change issues
Increasingly, civil society has a critical role to play in measuring countries’
commitments to reduce emissions, including the quality of monitoring and reporting,
as well as the disbursement and implementation of climate funding. The fulfilment
of these activities could be strengthened by incorporating anti-corruption tools and
indicators into existing assessment criteria, however, and promoting ‘open budget’
and other public sector transparency tools in the climate change arena.
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39. EXECUTIVE SUMMARY xxxix
11 Encourage the public’s participation in and oversight of policy development
at the local, national and international levels
Civil society must play a bridging role, ensuring that the public is aware of national
climate policies and decision-making on local projects. Civil society also needs to
assist communities to engage with international schemes and, in the case of REDD,
ensure that local communities understand carbon rights and retain the use of their
resources.
Climate governance includes civil society’s active engagement in national and
international policy development, which goes some way to guarantee that the voices
of the most marginalized are heard. Civil society must nonetheless advocate for a
more sustained commitment from institutions and businesses that public
participation has to be secured in local, national and international decision-making
processes, including the UNFCCC.
Civil society in relevant countries should also seek to engage governments in the
development of national action plans for adaptation, mitigation actions and their
REDD readiness programmes in order to make sure that transparency and
accountability are duly incorporated.
12 Build broader coalitions for integrity in climate governance and ensure that
the interests of all stakeholders are represented and taken into account
Civil society is, arguably, more coordinated and sophisticated in its engagement on
climate than on any other global public policy issue. Civil society will be even more
effective in the climate change arena, however, if it consolidates its diverse areas of
experience, from the environment to development, to humanitarian assistance and
human rights, to the anti-corruption movement. With environmental NGOs in the
lead, civil society coalitions have already taken great steps forward in presenting a
unified voice, but much more can be done to raise visibility and create common
approaches that cut across different NGO sectors. Conversely, much more can be
done to integrate and mainstream anti-corruption approaches into the work of
climate change organizations. It is hoped that the Global Corruption Report will
contribute to greater NGO cooperation on this urgent issue.
Notes
1.
2.
3.
Richard Baldwin, Regulation Lite: The Rise of Emissions Trading, Law, Society and Economy
Working Paper no. 3/2008 (London: London School of Economics, 2008).
See http://eiti.org/.
See www.constructiontransparency.org.
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43. 1.0
Defining the challenge
Threats to effective climate governance
Transparency International
Introduction
There will perhaps be no greater challenge to global governance in the 21st century
than climate change. Successfully meeting that challenge will require trust and
cooperation between countries, across stakeholders, within communities and,
fundamentally, in the new institutions and processes created to steer humanity’s
collective efforts. The difference between success and failure could not be starker.
‘Climate governance’ is a relatively new term in the development and environmental
lexicon, but it is assuming increasingly regular usage. ‘Governance’ in its broad sense
refers to ‘a concept that goes beyond the traditional notion of government to focus
on the relationships between leaders, public institutions and citizens, including the
processes by which they make and implement decisions’.1 The practice of ‘good’
governance contains certain core characteristics that promote equity and
accountability and minimize opportunities for corruption. Good governance covers
a range of practices, including respect for the rule of law, enhanced disclosure and
greater participation. Increasingly, good governance also implies sustainable systems
– both for governing and for outcomes.
‘Climate governance’ can be understood as the processes that currently exist at the
international, national, corporate and local levels to address the causes and effects of
climate change. This is a very wide spectrum, positioned in the framework of
international conventions, norms and regulations, and applied through
intergovernmental institutions, compliance mechanisms and funding bodies. Climate
governance incorporates independent systems of governance in their own right –
regional, national and city governance, as well as multi-stakeholder partnerships –
thus increasing its complexity.2
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44. 4
INTRODUCTION
Good climate governance needs to be at the centre of effective responses to
climate change, including the disbursement and use of huge future investments.3
Currently the system of climate governance is diverse and fragmented, and lacks
connectivity – and, by extension, accountability – to those most affected by climate
change. Efforts to strengthen the architecture of climate governance will therefore
have to build in safeguards against risk, including corruption risks, in order for
decisions made to have collective ownership, legitimacy and, ultimately, meaningful
effect at the international, national and local levels.
The need for climate governance: science and the impacts of
climate change
One starting point for assessing climate governance is to review the science of
climate change (see box 1.1).4 The summary of peer-reviewed scientific knowledge
of climate change shows that the problem is acute and that the world has to act
immediately.
The scientific summary also shows that those countries least responsible for climate
change are those most likely to suffer, and those people who subsist on the land are
likely to be least equipped with the capacities to adapt to climate change. In fact, as
table 1.1 illustrates, the average per capita greenhouse gas (GHG) emissions in the five
countries in the world most vulnerable to climate change are 20 times lower than in
developed countries, where the average per capita emissions are more than 11 tonnes
per annum.5
Country
Global Climate Risk
Index score6
(1990–2008)
Per capita GHG emissions per annum (tonnes
CO2)7
Bangladesh
8.00
0.25
Myanmar
8.25
0.25
Honduras
12.00
1.15
Vietnam
18.83
1.10
Nicaragua
21.00
0.79
Table 1.1 Climate risk against per capita emissions
In such countries, it is projected that increasing resilience to climate variation will
need to take place just to maintain current levels of development or there is a serious
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45. DEFINING THE CHALLENGE
5
Box 1.1 Scientific basis of climate change
The synopsis of peer-reviewed science is presented by the Intergovernmental Panel on Climate
Change (IPCC), whose 2007 report (its Fourth Assessment Report) found that ‘warming of the
climate system is unequivocal’ and that most of the observed increase is ‘very likely [above 90%]
due to the observed increase in anthropogenic [man-made] greenhouse gas concentrations’.8 This
has resulted in rises in air temperature of an estimated 0.7°C in the last 100 years, and warming of
waters and subsequent sea-level rise of between 2.4mm and 3.8mm per year from 1993 to 2003.
The IPPC developed six possible scenarios in 2000 for measuring the effect of future climate
change, depending on the levels of commitment and realization of reducing GHG emissions, in
which a worst-case ‘business-as-usual’ model shows a 6.4°C temperature rise by the end of the
century.9 Such scenarios have resulted in a general consensus among states that the global
temperature rise should not exceed 2°C, beyond which climate ‘feedback’ (secondary changes due
to temperature increases) and other events would become unpredictable and the Earth may reach
a tipping point, beyond which the effects of climate change cannot be reversed.
Above a 2°C temperature increase, sea levels will continue to rise, oceans will acidify further,
sea ice will shrink, precipitation will increase in high latitudes and decrease in subtropical regions,
and it is ‘very likely that extremes, heat waves and heavy precipitation events will continue to
become more frequent’.10 Discernible impacts are already recorded in biological systems with
glacier lake outbursts, a reduced length for growing seasons, losses of coastal wetlands and
bleaching of sea corals. With temperature rises exceeding 1.5–2.5°C, 20–30 per cent of plant and
animal species are likely to be at increased risk of extinction.
What all this means for human development is difficult to predict, although the IPCC has
concluded that it is highly likely that all regions will suffer negative economic effects, with
‘developing countries expected to experience larger percentage losses’.11 The most vulnerable
societies will be those whose economies are closely linked to climate-sensitive resources and in
areas of rapid urbanization where population growth is already putting stress on scarce resources.
risk of undoing progress made under the Millennium Development Goals.12 The
cumulative effect was described by the United Nations Development Programme
(UNDP) Human Development Report 2007/2008 as ‘what could be the onset of major
human development reversal in our lifetime’, consigning ‘the poorest 40% of the
world’s population – some 2.6 billion people – to a future of diminished
opportunity’.13
The physical effects of climate change are clear. Climate change above 2°C will
increase food and water scarcity, as well as leading to the flooding of coastal areas
and increasing incidences of conflict over resources. Indigenous, forest and coastal
peoples’ livelihoods will be irrevocably altered by seasonal shifts, including the
submergence of small island states due to sea level rise.14 According to Care
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46. 6
INTRODUCTION
International, forced displacement and mass migration ‘will be in the tens of millions
or more’.15 The most vulnerable are most adversely affected, including women and
children. Displacement in turn places huge burdens on neighbouring states, which
often are also vulnerable to climate change and other stresses, multiplying governance
challenges.
When responses to climate change are then partially or substantially lost to
corruption, not only does the quality of projects suffer, but the result is that the
ongoing effects of climate change are worst for those who can least afford it. A more
strategic, ambitious approach to climate governance will therefore contribute to
better outcomes for climate policy and, ultimately, for the planet. Getting it wrong
could put a number of solutions at risk.
Evolving climate governance frameworks
The urgent need for international climate policy cooperation was first acknowledged
at the UN Conference on Environment and Development (or Earth Summit) in Rio
de Janeiro in 1992 with the adoption of the Rio Declaration on Environment and
Development16 for ‘a new and equitable global partnership through the creation of
new levels of cooperation among states, key sectors of societies and people’
(preamble). Recognising the special situation and needs of developing countries and
the responsibility of developed countries,17 the declaration affirmed that
‘environmental issues are best handled with [the] participation of all concerned
citizens’ through access to information and participation in decision-making
processes. Agenda 21 of the Earth Summit also delegated nine representative groups
to engage with the UN on sustainable development, and the same groupings are
today represented in international climate governance.18 While addressing
environmental concerns more broadly, the Rio Declaration also constituted the
blueprint for climate governance.
The Earth Summit produced the UN Framework Convention on Climate
Change (UNFCCC), which remains the cornerstone of international climate
policy, setting mandatory limits on individual states’ greenhouse gas emissions
according to the ‘common but differentiated responsibilities’ for industrialized
(Annex I) and non-industrialized (non-Annex 1) state parties.19 Among the
convention’s scant provisions related to governance is one that states should
‘encourage the widest participation in [the climate change] process’ (article 4(1)
(i)), through public access to information on climate change and its effects, and
public participation in addressing climate change and its effects and developing
adequate responses (article 6).
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47. DEFINING THE CHALLENGE
7
The UNFCCC’s Conference of the Parties (COP) is tasked with reviewing
implementation of the convention. It meets annually and comprises the most
high-level political forum in climate governance, and may also ‘seek and utilize,
where appropriate, the services and cooperation of, and information provided by,
competent international organizations and intergovernmental and non-governmental
bodies’. The COP is supported by the Subsidiary Body for Implementation (SBI)
and the Subsidiary Body for Scientific and Technological Advice (SBSTA), both of
which play important oversight roles and provide limited access for public
participation.
Finally, the convention mandated a Secretariat (often also referred to as the
UNFCCC), to make arrangements for the COP and its subsidiary bodies, coordinate
with other relevant secretariats and assist states in implementing the convention.
Comprising some 400 professional staff with technical expertise, the Secretariat
fulfils an important function in the overall system of climate governance.20
The Kyoto Protocol, which entered into force in 1997, was the first update to the
convention, committing Annex I countries to reduce their GHG emissions by an
average of 5 per cent against 1990 levels over the five-year period 2008–2012. It
laid out three market-based mechanisms for creating incentives to reduce emissions:
emissions trading, offset schemes in developing countries21 and offset schemes
between industrialized countries.22 The governance of these incentives is spread
across the Executive Board of the UN Clean Development Mechanism, the UN
Joint Implementation Supervisory Committee, and various regional and national
emissions trading schemes, all of which feed into reporting at the international level
on efforts to meet Kyoto commitments.
The financing of efforts to address climate change is critical to any chance of
future success. A multiplicity of funding mechanisms outside the UNFCCC,23
administered by the World Bank, the UNDP, the Global Environment Facility
(GEF), the European Commission and numerous bilateral donors,24 some of which
are relatively untested, create significant coordination challenges for governance. In
addition, new pledges have been made by developed countries at the COP in
December 2010 to jointly mobilize (or ‘fast track’) US$30 billion a year for the
period 2010–2012, and US$100 billion a year by 2020 to address the mitigation
and adaptation needs of developing countries.25 The newly established Green
Climate Fund, under the interim trusteeship of the World Bank, is expected to
administer ‘a significant share of new multilateral funding for adaptation’. However,
the roles of Green Climate Fund’s Transitional Committee still needs to be defined,
as well as the creation of a new standing committee to improve coherence and
coordination in the delivery of climate financing.26
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48. 8
INTRODUCTION
Forestry currently accounts for 15–20 per cent of GHG emissions through
deforestation,27 and yet when forests are left undisturbed they act as an important
natural ‘sink’ for CO2 emissions. The UN programme for Reducing Emissions from
Deforestation and Forest Degradation (REDD), established in September 2008, is
the single largest programme to mitigate climate change in forestry, and therefore an
important part of the climate governance system. The UN REDD Programme
Policy Board provides strategic direction to the programme, and consists of donor
and programme countries, intergovernmental agencies and, most notably, the
chairperson of the UN Permanent Forum on Indigenous Issues and one civil society
representative.28 The reduction of emissions from deforestation and the enhancement
of forest carbon sinks was formally endorsed by the COP in Cancún in December
2010 and REDD funding is already available to assist selected countries in preparing
for REDD.
The international climate governance system is rounded out by the Ad Hoc Working
Group on Long-term Cooperative Action (AWG-LCA), which was established ‘to
enable sustained implementation of the Convention beyond 2012 and the end of the
Kyoto Protocol’, and is therefore of critical importance to the shape of future
governance.29 As this infamously failed to materialize in the 15th COP in Copenhagen
last year, the COP extended the mandate of the AWG-LCA to present its conclusions
at COP 16 in Cancún, and again at COP 17 in Durban in 2012.
Outside these nominally interconnected instruments and bodies, a further 500 or
so multilateral and bilateral agreements add to the scope of climate governance.30
Although many separate initiatives may advance progressive agendas beyond the
‘lowest common denominator’ approach of international consensus-building, other
processes create conflicting paths.31 What is clear, however, is that fragmentation
needs to be addressed in order to improve the coordination of international climate
governance.
A typology of climate corruption risks
It is evident that levels of trust need to be increased for the current format of
international climate governance to perform most effectively. The present mistrust is
founded on suspicion among states in international negotiations, particularly
between those that are historically responsible for climate change and those that are
most likely to suffer its effects. The limited provision for public participation in the
UNFCCC has also resulted in slow institutional responses to the need for wider
engagement and access to information, which would lead to increased public
ownership in the process. At the same time, civil society faces its own challenges of
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49. DEFINING THE CHALLENGE
9
ensuring the equitable representation of interests at the international level.
Nonetheless, despite slow consensus-building, states have now converged around
the need to establish clear rules and compliance mechanisms for mitigation and
adaptation, which will serve to strengthen legitimacy and trust.32
It is external risks, however, including corruption risks, that pose the most critical
challenge to the sustainability and ultimate success of climate governance. From
political decision-making and the generation of global financing for adaptation and
mitigation to the workings of the carbon markets and national plans to build climate
resilience, the following is a typology of cross-cutting corruption risks that represent
key challenges to climate governance, all of which are dealt with in detail in the Global
Corruption Report.
While the COP and many of its subsidiary bodies exhibit openness to public
participation to varying degrees, a lack of transparency and public disclosure is visible
across a number of other important decision-making processes. At the board level of
the Clean Development Mechanism (CDM) and the Adaptation Fund, there is no
room for any independent oversight of decision-making. In terms of funding,
developed states are accused of failing to account for the source of ‘new and
additional’ pledges, leading to accusations that they are diverted from official
development assistance (ODA) commitments and double-counted as both
development and climate funding. As members of the scientific community look
reluctantly at the possible need for intentional manipulation of the Earth’s
atmosphere, moreover, concerns have been raised at the lack of required disclosure
on geoengineering research and funding.
At the national level, the limited participation of stakeholders in the planning and
monitoring of adaptation projects is likely to present corruption risks for national
climate institutions. Countries that find themselves endowed with green economy
resources will also have to take greater steps towards transparency in planning and
financing the development of resources, as is already a concern in relation to lithium in
Bolivia, for example.33
Policy capture and undue influence are fundamental risks. The scale of the transition
has created powerful national lobby groups, which can adversely affect progress
through undue political influence, media manipulation and the funding of front
organizations.34 In forestry, the risk of policy capture at the international level can
affect, for instance, the definition of forests,35 the issuance of permits and
conditionality. Policy capture is also a risk in carbon trading.36 Where carbon
markets have been established, market players are seen to be involved in setting the
rules to their benefit. As a result of lobbying activities, the power sector, for example,
has a surplus of permits far above its actual emissions in Europe.37
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50. 10
INTRODUCTION
Conflict of interest is a pervasive corruption risk in climate governance at the
international and national level. In Spain a number of civil servants allegedly
authorized licences for photovoltaic plants to companies owned by relatives.38 At the
international level, CDM Executive Board members are not excluded from occupying
conflicting positions, such as membership of national approval boards, for example.
Validators of CDM or REDD projects may have a potential conflict of interest as
they are required to be paid by project developers, rather than out of a common
pool, thus raising the risk of actually increasing emissions.39 In the CDM, designated
national authorities (DNAs) can, for instance, serve in ministries for industry or
finance. In terms of funding, the current relationship between UNFCCC funds and
administrators with potential vested interests, such as the World Bank and the
Adaptation Fund (for which the World Bank plays an interim trustee role), can
result in conflicts of interest, and revolving door policies are a particular problem.
Similarly, the administration of short-term funding via the World Bank, derived
from commitments in the Copenhagen Accord, has raised concerns about
conditionality for what is intended to be unconditional support.
Creative accounting and reporting are serious cross-cutting risks. In some cases the
miscounting of emissions is deliberate. Companies regulated under emissions trading
schemes may have incentives to inflate their emissions data so as to establish a
baseline that makes ‘reductions’ easier at a later date. In many other cases, however,
inaccurate reporting is the result of legal loopholes or gaps in reporting rules. These
causes must be addressed, as the use of unreliable data can weaken mitigation
strategies and chip away at public confidence.
In the absence of sufficient oversight, creative accounting can lead to the doublecounting of emissions by companies of their own reported mitigation efforts, which are
also sold as credits, thus nullifying the environmental integrity of the emissions
reductions. If developing countries adopt voluntary reductions targets, doublecounting may also occur: emissions reductions generated from mitigation or REDD
projects could be counted against national emissions and sold as credits to allow the
same amount of pollution in developed countries.
Under the CDM and REDD initiatives, the same will happen if the additionality
principle40 is not met. If the projects would have taken place regardless of the CDM
or REDD, then emission reductions are not ‘additional’ and cannot produce
emissions credits for sale. Proving intent for project implementation is difficult,
however, and at least one study suggests that, by 2007, up to 20 per cent of the
credits generated for the CDM came from projects for which additionality was
unlikely or questionable.41 Verifying emissions reductions will be particularly
difficult for REDD, and there is a real risk of fictitious projects being approved if
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